Prospects for
Inclusive Social Citizenship
in an Age of Structural Inactivity

by Anton Hemerijck

Dr.
Anton Hemerijck is an Associate Professor of Policy and Politics in the
Department of Administration at Erasmus University in Rotterdam. He is also a
visiting researcher at the Max Planck Institute for the Study of Societies.

Abstract

One of the paradoxes of contemporary European welfare
states is that while today practically every adult citizen seeks gainful
employment, jobs are hard to come by. There is a growing number of (economically)
inactive citizens, people of working age who are structurally dependent on
social policy for their livelihood. In this paper the rise of structural
inactivity is analyzed from two contrasting sets of arguments about the "unintended"
or "perverse" effects of social policy. The first argument revolves
around the decline of the traditional work ethic in the welfare state; the
second argument suggests that the predicament of structural inactivity is the
consequence of accumulated rigidities and historically perverse social security
policy choices. Both arguments are subsequently confronted with empirical
evidence from the highly advanced welfare state of the Netherlands, which after
a deep crisis of inactivity has been able to reverse the cycle of declining
activity and rising inactivity through a lengthy process of negotiated social
reform. Finally, the paper, in terms of normative policy advice, considers a
number of "employment-friendly" policy initiatives which are likely to
result in an increase of labour force participation in persons and a voluntary
decrease in hours worked. This could foster a more nuanced and less gendered
work ethic, while maintaining the moral integrity of an inclusive and
rights-based conception of social citizenship.

One of the paradoxes of contemporary European welfare
states is that while today practically every adult male and female seeks gainful
employment, jobs are hard to come by. There is a growing number of (economically)
inactive citizens, people of working age who are structurally dependent on
social policy for their livelihood. The predicament of inactivity is
concentrated among the low-skilled, ethnic minorities and the long-term
unemployed. A comparison of six European countries, considering unemployment,
sickness, occupational disability, maternity, general need and early retirement,
in the age group between 15 years and the retirement age, reveals that levels of
inactivity have dramatically increased over the past decade (see Table 1).
Moreover, in all six countries, except Denmark, the rise in the volume of
inactivity in the 1980s coincided with a decline in labour market participation
of the population between 14 years and the retirement age. During the first half
of the 1990s activity continued to decline in Denmark, Germany and the United
Kingdom.

Table 1
Distribution of activity (A) and inactivity (I) of population until
retirement age (in per cent)

Year

Belgium

Denmark

Germany

France

United Kingdom

Netherlands

USA

A

I

A

I

A

I

A

I

A

I

A

I

A

I

1980

55

20

56

19

59

13

59

13

61

12

49

16

58

15

1985

51

25

58

22

56

27

56

16

57

17

45

20

60

13

1990

52

26

60

24

60

27

56

17

61

16

47

20

64

14

1995

55

29

58

26

57

27

55

20

58

20

48

20

63

14

Source: Netherlands Economic
Institute, Inactivity/Activity ratios, A descriptive analysis for six
European countries, the USA and Japan, 1998
Note: Inactivity is defined as the relative volume of people in the
population in the age group between 15 and 64 who receive
earning-replacing social benefits for the risks of old age, survivors,
disability, sickness, unemployment, and social assistance, relative to
the workforce. Activity is defined as the relative volume of labour
expressed in labour years, relative to the working age population, from
which the total benefit years due to sickness and maternity are
subtracted because these risks are already included in the
inactivityratio. Next to inactive and active poeple in the population
older than 15 years, there is a remainder group of people who are
neither active nor inactive. These are people still attending school or
university and people who are dependent upon other active or inactive
people.

How do we explain the rise of structural inactivity in
contemporary European welfare states? Are we living in a world of jobless
growth? Do the citizens no longer wish to work? Do they, pampered by generous
standards of social protection, prefer leisure? Or, are they sick or otherwise
unable to work? In this paper, I wish to explore the rise of structural
inactivity from two contrasting sets of arguments, both revolving around the 'unintended'
or 'perverse' effects of postwar social policy.

The first argument, rooted in cultural sociology, centres
around the alleged decline of the traditional work ethic in the welfare state.
By having dissolved the 'sacred' link between work and income, the welfare state
has come to undermine the motivation to seek gainful employment. The lack of
immediate feedback between work and income, conservative critics of social
policy contend, weakens the moral fibre of welfare recipients. The resultant
rise in inactivity contributes to the emergence of a 'dependency culture' of
benefit claimants.

While the causal chain of the decline of the work ethic
argument runs from the behaviour of citizens to the rise of inactivity, the
second argument, rooted in comparative political economy, suggests that the
institutional characteristics of national labour markets and social security
systems structure the level of inactivity. The crisis of inactivity, following
this line of reasoning, is not the result of crippling norms and values, but
rather the consequence of accumulated institutional rigidities and historically
perverse policy choices.

Although I thus treat the above explanation of the
inactivity problem as disconnected approaches, I am fully aware of the fact that
in the messy world of concrete empirical experience values and institutions are
inherently linked. To be sure, institutions embody values and changing values
can lead to policy adjustment. By the same token both institutions and values
structure incentives.

I would like to approach the arguments of the decline of
the work ethic argument and the proposition of deficient welfare state
institutions from the perspective of citizenship. By so doing, I wish to relate
T.H. Marshall's classic portrayal of the extension of citizenship and the
struggle for 'equal social worth' to contemporary conceptions of citizenship
(Marshall 1963). Next, I will empirically scrutinize the predicament of
inactivity on the basis of evidence from the Netherlands. I concentrate on the
Dutch experience for three reasons. First, the Dutch welfare state is one of the
most advanced welfare states in Europe. Second, the Netherlands did experience a
severe crisis of inactivity in the 1980s. Third, the recent Dutch employment
miracle presents a case history of a social policy regime that has adapted
relatively successfully to processes of demographic change, economic
restructuring, international competition, labour market flexibilization and
individualization, by way of social policy reform bent on reversing the cycle of
declining activity and rising inactivity.

The final normative section considers policy. What are the
prospects for effective social policy in an age of structural inactivity,
adapting as it were Marshall's principle of 'equal social worth' to the new
realities of diversified labour market conditions and heterogeneous household
patterns? I will explore two broadly debated policy alternatives which are often
pitted against each other in debates about the future of the welfare state.
These are, first, 'workfare' policies, designed to repair the direct link
between the obligation to work and right to welfare. Alternatively, there is the
proposal of the introduction of a universal 'citizen's income', which, by
contrast, is directed towards a radical decoupling of the conditional connection
between work and income in social policy.

The resurgence of the concept of citizenship in
contemporary political and social science discourse has invited a critical
rereading of T.H. Marshall's famous 1949 lectures, published together in 1963
under the title of Citizenship and Social Class (Culpitt 1992; Twine
1994; Bulmer and Rees 1995). In these lectures, Marshall portrayed the extension
of citizenship rights in terms of a progressive tale of democratization and
class-abatement. Based on the British experience, Marshall locates the origins
of the struggle for citizenship with the affirmation of civil or legal rights in
the eighteenth century. The nineteenth century gave rise to the inauguration of
political rights. The struggle for citizenship reached its completion in the
second half of the twentieth century with the attribution of the social rights,
which Marshall defined as:

... the whole range from the right to a modicum of
economic welfare and security to share to the full in the social heritage and
to live the life of a civilized being according to the standard prevailing in
the society. (Marshall 1963: 74)

Protecting the vulnerable and preventing the disadvantaged
from becoming vulnerable lies at the heart of Marshall's social ethic of 'equal
social worth'. As such, the welfare state held out a promise of the enlargement,
enrichment and equalization of people's 'life chances' (ibid.: 107). Most
important, the introduction of a universal right to real income, 'not
proportionate to the market value of the claimant' (ibid.: 100), for Marshall,
was the key institutional innovation of the postwar welfare state.

Marshall's conception of citizenship revolves around three
constitutive elements. First, citizenship is about the membership in a
nation-state and a relationship between the state and citizens. Second, it
delineates a bundle of universal rights. Third, it refers to a particular
collective identity of a political community, within which citizenship rights
can be exercised. As a bundle of rights, according to Marshall, citizenship is
inspired by and in turn can strengthen:

a (...) direct sense of community membership based on
loyalty to a civilization which is a common possession. It is a loyalty of
free men endowed with rights and protected by a common law. Its growth is
stimulated both by the struggle to win those rights and by their enjoyment
when won. (ibid.: 96)

In other words, social rights not only provide individuals
with a sense of material security against the adverse effects of poverty,
illness, disability, unemployment and old age in a territorially bound state. In
turn, social security encourages a sense of belonging and commitment to a kind
of society, i.e. the welfare state, within which citizens live.

Marshall was not silent on the obligations for effective
social citizenship. He writes: "If citizenship is invoked in the defense of
rights, the corresponding duties cannot be ignored" (ibid.: 123).
Nevertheless, Marshall was fully aware of a 'changing balance between rights and
duties' in the postwar welfare; whereas precisely defined 'rights have
multiplied', there are only a few citizenship obligations that are really
compulsory, such as the duty to pay taxes for welfare benefits and social
services, pursue an education, and serve in the military. Many citizenship
obligations have turned into informal, non-committal and rather vague
responsibilities (Marshall 1963: 129; Janoski 1998: 106).

Contemporary students of social policy have criticized
Marshall's rather 'whiggish' portrayal of the progressive extension of
citizenship. While perhaps aptly capturing the British experience, Marshall's
logic of social progress has been found wanting when applied to other national
experiences. In Germany, for instance, social policy innovation came first, so
as to compensate for deficient political rights (Bendix 1964; Esping-Andersen
1990). Feminists have criticized Marshall for the absence of gender from his
exposition. To be sure, a theory of 'social citizenship' that is merely
applicable to male breadwinners as right-bearing citizens, cannot claim
universality (Pedersen 1993; Pateman 1988; Vogel 1991). In defence of Marshall,
I would like to emphasize that today there is much cross-national congruity in
terms of citizenship rights. All the advanced democracies of the European Union
are fully committed to the rule of law, parliamentary democracy, gender equality
and the welfare state. Over the last two decades, the European Commission in
particular has actively pursued regulation in the area of equal pay and equal
treatment at work and in matters arising from pregnancy (Meehan 1993).

More importantly, Marshall, writing at the apex of the
'Golden Age' of postwar prosperity and full (male-breadwinner) employment, did
not fully appreciate the immanent tension between 'negatively' defined civil
rights and 'positively' defined social rights (Offe 1993). Civil rights, by
virtue of being defined in negative terms of government non-interference, are
operationally precise and can as such more easily be enforced. By contrast,
social rights, defined in substantive terms of need, imply affirmative state
action of meeting the needs of the vulnerable. By their very nature, social
needs can never be precisely demarcated. Social rights, designed to foster an
equalization of 'life chances', oblige the political community to interfere in
and modify the distributive consequences of market processes. Offe rightly
states that any standard of social rights is inherently subject to potential
upward as well as downward adjustment depending not only on changes in political
commitment towards redistribution and state capacities to administer and
implement social policy legislation, but also on aggregate economic performance.
Consequently, the question of 'how much' is good enough, and 'what kind' of
social services are required, on behalf 'what categories of people', and at 'whose
expense' can never be unambiguously settled.

The recent rediscovery of the concept of citizenship has
brought together two different intellectual perspectives to the debate, which
are worth relating to Marshall's classic contribution. These are civic
republicanism and communitarianism (Beiner 1995; Kymlicka and Norman 1995).
While sharing in a critique of liberal political theory, civic republican and
communitarian authors adhere to distinctly different normative foundations of
their respective conceptions of citizenship. Civic republicans endorse a more
restricted political understanding of citizenship, in terms of the practice of
political participation in public decision-making by free, equal, autonomous and
competent citizens (Barber 1984). Communitarians, on the other hand, adhere to a
more general - sociologically informed - notion of citizenship, founded on
shared values and put into practice in various, not merely political, 'spheres
of justice' (Walzer 1983). To employ Albert Hirschmann's vocabulary: the civic
republican tradition defines citizenship in terms of a 'thick' political
practice of exercising 'voice' in the political forum, whereas for
communitarians the moral primacy lies with a 'broader' sociologically informed
sense of 'loyalty' on the basis of shared values as the normative foundation of
a society-centered concept of citizenship.

Both schools have articulated pointed critiques of
contemporary social policy. Civic republicans fear that the welfare state,
organized around a multitude of substantive categories of need, contributes to
the decline of civic engagement and a widening of the gap between public
administration and the citizenry. Social policy, it is argued, encourages a
privatized retreat from the ideal of citizenship as a practice of political
participation. Communitarians lament the decline of the family, the waning of
associational life and (civil) religion, and the erosion of an ethic of
obligation (Lasch 1979; Bellah et al. 1985; Etzioni 1993; MacIntyre 1988;
Selznick 1992). However much the ideology of the welfare state may underscore
the affirmation of community, its operative ethos, many communitarians maintain,
is decidedly anti-communitarian. Social policies, implemented through
affirmative state intervention, display little concern for the integrity of the
institutions of civil society.

Considering it was written at a time of the resurgence of
mass unemployment and important changes in the world of work, it is rather
surprising that issues of employment do not feature prominently in civic
republican and communitarian literature. Communitarians prefer to focus on other
spheres of social life like neighbourhoods and schools. In the civic republican
tradition there is only one notable counter-example. Judith Shklar, taking issue
with Hannah Arendt's elitist disdain for the mundane world of work, maintains
that self-directed economic independence through productive work took the place
of honour as the object of social aspiration in nineteenth century America (Shklar
1991). For Shklar, the modern citizen has become a member of two interlocking 'public
orders'. To be recognized as a fully fledged citizen he or she must not only be
an equal member of the polity, as a voter, but should also be independent, which
under contemporary social and economic conditions means that he or she must be
an 'earner', a 'free remunerated worker', finding a source of pride in being
'self-made' (ibid.: 64). The intimate connection between work and citizenship in
Shklar's understanding of citizenship remains problematic. One could question
whether gainful employment, executed in hierarchically organized firms, is
really able to nourish the core competencies of independent judgement and
individual autonomy necessary for civic engagement in politics.

Rereading Marshall in the context of the debate between
civic republicans and communitarians, I am tempted to reclassify his lectures
for contemporary use as being sociological institutionalist. In line with the
communitarian tradition, Marshall's lectures were empirically oriented,
sociologically informed, adhered to a rather expansive conception of politics
and society, and particularly concerned with the societal processes of
inclusion. Unlike contemporary communitarians and more in line with civic
republican reasoning, Marshall's approach is far more political. He resists the
kind ethnic subculturalism that is advocated by a fair number of communitarians,
who are rather silent on rights but strong on moral obligations. Marshall's
state-centered, universalist, rights-based justification of the welfare state
captures an empowerment strategy, sanctioned by law, to enable all citizens to
exercise their basic civil and political rights, rightly underscored in the
civic republican tradition, so as to let them share 'to the full' in the 'social
heritage' of the nation in accordance with the 'standard prevailing in society'.
Although Marshall realized that full employment for those able to work and an
adequate system of benefits for those who were not were crucial to the creation
of postwar political identities. Under conditions of the 'Golden Age' of full
employment, he conceded that it was 'no easy matter' to revive a sense of
personal obligation to 'put one's heart into one's job and work hard' (Marshall
1963: 123-124).

The breakdown of the Bretton Woods monetary system in 1973
and the steep rise in oil prices between 1973 and 1979 brought an end to the
'Golden Age' of postwar prosperity and full employment and stalled the
progressive expansion of social rights. While the advanced industrial societies
employed remarkably divergent national strategies of crisis management during
the late 1970s, cutbacks in social security were introduced practically
everywhere during the 1980s. Access to welfare state programmes was made more
selective, levels of benefits were reduced, and periods of coverage curtailed.
Many conservative governments that came to power in the early 1980s were elected
on their promise to scale back the welfare state.

The rhetoric of neo-liberalism and conservatism, touting
the superiority of 'negative' economic over 'positive' social rights, appeared
very convincing against the background of the rise of mass unemployment, failing
Keynesian macroeconomics, and accumulated deficiencies in social policy
implementation. Social policy, following the prevalent sociological critique,
had not lived up to the promise of the fulfilment of citizenship because it
perversely weakened the moral fibre of citizens. This critique is echoed in the
thought-provoking argument portraying the decline of the work ethic in the
welfare state advanced by Daniel Bell in the late 1970s. In The Cultural
Contradictions of Capitalism (1979), recently republished with a new
afterword (1997), he argues that welfare capitalism has - unintentionally -
fallen victim to its own success, because the principles of the economic realm
and those of the cultural domain have led people in contrary directions. The
spectre of individualism, released by the Reformation and the Enlightenment,
activated the values of industriousness, hard work, thrift, entrepreneurship,
and 'deferred gratification' in early-modern capitalism. Under the welfare state,
ironically, individualism has encouraged the development of an alternative 'hedonist'
ethos, which is fundamentally at odds with the original sober mentality of
early-modern capitalism. Having dissolved the 'sacred' link between work and
income, the welfare state contributed to the erosion of the traditional work
ethic as a central point of moral reference. This constitutes, according to
Bell, the cultural contradiction of capitalism:

Capitalism has lost its traditional legitimacy, which
was based on a moral system of reward rooted in the Protestant sanctification
of work. It has substituted a hedonism which promises material ease and luxury,
yet shies away from all the historic implications of a 'voluptuary system',
with all its social permissiveness and libertinism. Hedonism, as a way of life
promoted by the marketing system of business, constitutes the cultural
contradiction of capitalism. (ibid.: 84)

Bell's cultural critique of the welfare state is based
upon the presupposition that, at an earlier stage, bourgeois capitalism was
supported by a strongly entrenched, morally obliging work ethic, like the one
portrayed by Max Weber in his classical study The Protestant Ethic and the
Spirit of Capitalism (1930). Following Bell, there is a paradoxical elective
affinity operative between the institutions of the welfare state and its ethos
of hedonism, which runs counter to the Wahlverwandtschaft Weber found
between Calvinist doctrines and the spirit of early-modern capitalism. To
paraphrase Weber: it seems that the consumerist Gesinnungsethik of the
welfare state has driven out the original Verantwortungsethik of
early-modern bourgeois capitalism.

It should be emphasized that the thesis of the decline of
the work ethic is not only popular among conservative sociologists like Bell,
but also in progressive academic circles, where there was and still is much
agreement that the welfare state is no longer able to reproduce the cultural
resources and economic sanctions that are necessary for stabilizing the moral
obligation to seek gainful employment. This, however, for altogether different
reasons than the ones suggested by Bell. Claus Offe, and more recently Jeremy
Rifkin, maintain that the work ethic fails as an important function of social
integration, because jobs are being 'rationalized away' by economic
restructuring. Technological change and international competition increasingly
put a premium on capital-intensive production, resulting in the structural
elimination of work. Moreover, the time in which people partake in gainful
employment throughout their lives has drastically decreased over the past fifty
years. And as levels of unemployment continue to rise, Offe believes that the
moral stigmatization of living off welfare will wear off. Beyond a certain
threshold paid non-work or inactivity can no longer be plausibly accounted for
in terms of moral default (Offe 1985; 1996; Rifkin 1996).

Is the work ethic dead or alive, or has it changed? To
what extent have industrial restructuring and welfare reform contributed to a
weakening of the work ethic? Or are we to observe, contrary to the imaginative
sociological reasoning of Bell and others, a strengthening of the work ethic
over the past decade? On the basis of four empirical research efforts I will now
chart changing value orientations with respect to work and unemployment in Dutch
society.

On the basis of survey and panel research on value change
in Dutch society, we are able to assess and interpret changes with respect to
the appreciation of work as a moral obligation, on the one hand, and the norm of
the work experience as a central life interest. The conviction that work is a
moral obligation is operationalized on the basis of survey statements like: 'If
someone wishes to enjoy life, he or she has to be prepared to work hard for it',
or: 'Everybody who is able to work should do so'. Findings from the period from
1977 to 1985 display a relative decline in the appreciation of work as a moral
obligation (Ester and Halman 1994). Interestingly, the more drastic decline in
the work ethic of the late 1970s and early 1980s - a negative trend of 2.25 per
cent per year until 1985 -, is followed by a marked slowdown, stabilizing at 0.8
per cent from 1985 to 1990. Additional panel research reveals inter-temporal
changes in the work ethic as a moral obligation, which are far from consistent
with the hypotheses of unilinear decline (ibid.: 128). In large part, the
variation can be explained in terms of personal and group characteristics.
Elderly respondents endorse a stronger work ethic than younger people, and more
educated respondents embrace a weaker, less obliging work ethic than low-skilled
workers. On the whole, male breadwinners endorse a stronger work ethic than
housewives and mothers.

The evidence of the strong endorsement of paid work as a
central life interest in survey research concurs with the findings of numerous
opinion studies of the Dutch Social and Cultural Planning Bureau (SCP 1986;
1992; 1994; 1996). According to SCP research, the wish to partake in the world
of gainful employment may, if anything, actually be growing rather than
weakening. The growing appreciation of gainful employment as a central life
interest in Dutch society is, in part, the result of the increased orientation
of women towards labour market participation. This in turn reflects higher
levels of education, values of economic independence and the conviction that
labour market participation demonstrates gender equality. Today, 50 per cent of
non-working women and mothers with small children aspire to a job in the future.
By contrast, for a majority of elderly men (i.e. above the age of 55), while
they endorse a strong, morally obliging work ethic, the appreciation of work as
a central life interest seems to be receding. This does not necessarily
constitute a contradiction. Older men, apparently, judge that they have worked
hard long enough (SCP 1994: 166-167).

The resilience of the appreciation of work as a central
life interest does not imply that work related values and aspirations have not
changed. The SCP identifies an ever greater variety of work-related values
underlying the general opinion that participation in the labour market remains
of central importance. There is much diversity with respect to the type of jobs
and particular work experiences that people seek, as is revealed in the
significant drop in the number of people who aspire to a traditional, regular,
full-time nine-to-five job, 5 days a week, 48 weeks per year, for 40 years. An
ever growing share of the population are looking for 'large' part-time jobs,
ranging from 20 to 30 hours a week. On average, more that one third of the women
currently holding full-time jobs would prefer to work part-time. Of the number
of women who are in 'small' part-time jobs of less than twenty hours, over a
quarter aspires to a 'larger' part-time job. Among men too, there is a growing
interest in part-time jobs. Next to the popular preference for part-time work,
there is a growing interest in different forms of leave, temporarily allowing
adult citizens to work shorter hours or interrupt the working career for a short
break to care for children or parents or go to university.

Qualitative research on the experience of long-term
unemployment and welfare dependency enables us to assess the relative strength
and weakness of the work ethic ex negativo. A study of three depressed
neighbourhoods in Amsterdam, Rotterdam and Enschede (Kroft et al. 1989;
Engbersen 1990), modelled on the famous study of the experience of unemployment
in the early 1930s in the Austrian industrial town of Marienthal (Jahoda et al.
1933), found not dissimilar symptoms of social-psychological strain, despite far
better levels of economic support: a loss of time structure, purposelessness,
self-blame, strain on mental and physical health, a decline of interest in
hobbies and in regular social contacts, loss of identity, a gradual loss of
employability, and a distinct decline in involvement in political affairs and
civic activities. Next to a dominant traditional culture of unemployment, Kroft
et al. found a minority of about 30 per cent of the respondents who displayed a
novel, more active way of coping with unemployment. For those adhering to this
modern culture of unemployment, mostly younger and better educated welfare
recipients, gainful employment is not an end in itself: It is a means, a gateway
to a certain standard of consumption and life style.

Most recently the Social and Cultural Planning Bureau
(1998) has updated earlier studies so as to allow for a comparison over time
among different categories of active and inactive citizens (the unemployed and
disabled workers) between 1974, 1982 and 1995. This study reveals, first, that
inactive citizens feel less stigmatized in 1995 than in 1982, which seems to
reflect an increased acceptance and tolerance of inactivity in its multi-faceted
forms of structural, part-time and temporary non-participation in Dutch society.
The authors of the SCP study take the increased acceptance of inactivity as
evidence for the continuing decline of the work ethic. This is only true for the
work ethic, narrowly understood in terms of the moral obligation to work. By
contrast, in terms of the appreciation of work as a central life interest, the
study shows that the inactive of the 1990s are far less resigned to losing their
job than their counterparts in 1982. They are much more prepared to make efforts
and concessions in order to find a job. By the same token, inactive citizens
appreciate social security less as a self-evident right. On average, the SCP
study suggests that inactive citizens seem to accept the new image of an 'activating'
welfare state. To be sure, the disadvantages of inactivity are more keenly felt
in 1995 than in 1974 and 1982. Inactive citizens feel locked out of society,
suffering from feelings of uselessness, aimlessness, health problems and social
isolation. One of the most striking findings is that, despite numerous
reductions of benefits and restrictions in terms of eligibility, the unemployed
and disabled workers report that they are equally satisfied with their financial
situation in 1995 as they were in 1982. Although women continue to appreciate
work and inactivity different from men, the study reveals that the gender gap is
closing. Single women without children virtually have the same attitudes towards
work and inactivity as men.

The overall conclusion that emerges from the above
research efforts confirms that paid work continues to occupy a prominent place
in the lives of most adult citizens. The dynamic of contrary value
reorientations over time cannot be considered as evidence for an overall
across-the-board decline of the work ethic. If anything, it could be argued that
the paid job is the only 'sacred cow' that has outlived the cultural revolution
of the 1960s. To say that the work ethic is alive and kicking is not the same as
saying that work-related values and behaviour have not changed. Increasingly,
more expressive values of self-realization, and hedonistic elements such as paid
vacation and a company car, are sought after in the work experience. While Dutch
society at large seems to have grown accustomed to a significant degree of
inactivity, a younger generation of welfare recipients have come to adhere to a
more relaxed, instrumental, work ethic.

If high levels of structural inactivity cannot be
explained by a decline of the work ethic, under conditions of welfare state
generosity and industrial restructuring, it is germane to concentrate on the
interactive effect of the operation of the institutions of the labour market and
the system of social security. Prima facie, persistent divergences in national
experiences of reducing labour supply and facilitating labour market exit since
the late 1970s indeed suggest that structural inactivity may be highly
contingent on the design of national patterns of labour market regulation and
social security legislation.

The structure of the link between the labour market and
the welfare state is central to the path-breaking work of Gøsta Esping-Andersen
(1990). Esping-Andersen highlights how social rights serve to protect the
inactive - the aged, sick, and the unemployed - by providing them with social
security and public assistance, so as to enable them to make ends meet without
necessarily relying on their (deflated) labour market value. Esping-Andersen has
coined this measure of social protection 'decommodification' (1990, 37). The
degree and scope of decommodification mitigates the immediate feedback between
work and income. In the language of neoclassical economics, decommodification
translates into structural disincentives to seek employment, undermining the
proper functioning of the labour market. Esping-Andersen's comparative study,
however, reveals that any exhaustive decoupling of work and income in various
welfare state regimes is the exception rather than the rule in postwar social
policy. Levels of social security benefit levels are largely tied to previous
work experience and are generally set below the level of last earned wages. In
addition, welfare recipients are obliged by law to look for work. Sanctions, in
terms of benefit cuts, can be forced upon claimants who reject job offers or
refuse to partake in job-training programmes. The only welfare state regime that
comes close to a fully decommodifying system is the 'social democratic' welfare
state regime, of which the Swedish model is exemplary. The social democratic
regime type executes a universal system of highly generous and universally
redistributive benefits.

Esping-Andersen's research reveals that the Scandinavian
welfare state is not fraught with excessive levels of inactivity and sub-optimal
levels of labour market participation. Paradoxically, it is the continental
welfare state, in which the conditional tie between work and income has remained
far more intimate, that is confronted with a crisis of spiralling inactivity,
falling levels of labour force participation, and jobless growth. The 'compensatory'
- transfer based - welfare states of France, Germany, Belgium, Italy, Spain and
the Netherlands are, according to Esping-Andersen, trapped in a pathological
vicious cycle of 'welfare without work' (Esping-Andersen 1996).

Because social security benefits are predominantly
financed out of payroll contributions from workers and employers, a complicated
pattern of mutual interaction between investments, productivity, labour
participation, wage costs and (non-wage) social security arrangements is
operative under the continental welfare regime. Under increased competitive
pressure, firms in high-wage economies can only survive if they are able to
increase productivity. This is most commonly achieved through labour-saving
investment strategies, raising productivity levels of workers through
high-quality vocational training and education, and/or by laying off less
productive or 'too expensive', mostly older, workers. High minimum wages and
substantial non-wage labour serve here as a productivity whip. However, they can
also engender an 'inactivity trap', whereby a virtuous cycle of productivity
growth runs into a vicious cycle of high wage costs, exit of less productive
workers and rising social security contributions, requiring further productivity
increases on competitive firms, eliciting another round of reductions in the
work force. Employment disappears in sectors where productivity increases
stagnate and the prices of goods and services cannot be easily raised. Moreover,
if service-sector salaries are linked to exposed-sector wage developments, this
logic frustrates job-growth in the labour-intensive public and private service
sectors, especially at the low end of the labour market. The particular
interplay between competitive adjustment and social protection in the
continental welfare state has clear labour market effects: overall low
employment and high levels of structural inactivity; low female participation
rates; declining participation of older workers; underdevelopment of part-time
jobs; and a below-average job growth in the service sector. At the low end of
the labour market this engenders on the demand side a shortage of jobs for the
low skilled and on the supply side a lack incentives to enter the labour market.
Moreover, the inactivity trap of the continental welfare state reinforces
existing 'insider-outsider' cleavages. Existing privileges of a diminishing
group of 'insiders' - highly productive workers with high wages and expansive
social rights - will be safeguarded at the expense of a growing population of
inactive 'outsiders' (elderly workers, women and youngsters), who remain
financially dependent upon either the welfare state or traditional breadwinners.

To what extent has the proverbial continental welfare
state regime of the Netherlands followed Esping-Andersen's scenario of 'welfare
without work'? Dutch labour market performance seems contradict the continental
pathology of declining activity and rising inactivity. At a rate of 1.8 percent
per year on average since 1983, Dutch job growth is four times the average for
the European Union (see Table 2). Unemployment has come down from an all-time
record in 1984 to less than six per cent in 1997, while the EU average remained
at over eleven per cent (see Table 3). In contrast to the American jobs machine,
Dutch job growth is less associated with a sharp increase in earnings inequality.

Source: OECD, Employment
Outlook, Paris, July 1996 and July 1997, Table 1.2
* estimate
** Until 1993 West Germany only

Table 3
Unemployment in the Netherlands, the European Union and selected OECD
countries, 1983-1996 (in per cent)

1983

1990

1993

1994

1995

1996

Netherlands

9.7

6.2

6.6

7.1

6.9

6.3

European Union**

9.2

8.5

10.6

11.4

11.1

11.5

Belgium

11.1

6.7

8.9

10.1

9.9

9.8

Germany*

7.7

4.8

7.9

8.4

8.2

9.0

France

8.1

9.0

11.7

12.3

11.7

12.4

Italy

7.7

9.1

10.3

11.4

11.9

12.0

Denmark

..

7.7

10.1

8.2

7.1

6.0

Sweden

3.9

1.8

9.5

9.8

9.2

10.0

United Kingdom

11.1

7.1

10.5

9.6

8.8

8.2

United States

9.6

5.6

6.9

6.1

5.6

5.4

Source: OECD, Employment
Outlook, Paris, July 1996 and July 1997, Tables A and B
* Until 1993 West Germany only
** Not standardised (commonly used definition)

A number of interrelated developments stand out in the
Dutch response to the continental crisis of inactivity (Visser and Hemerijck
1997). These are: (1) protracted wage moderation; (2) labour time reduction; (3)
social security reform; (4) the growth of part-time jobs; (5) the popularity of
temporary jobs; and (6), a record increase of female labour market participation.

Real wage moderation, agreed in collective bargaining at
the sectoral level by trade union and employers' representatives, has
contributed to curbing wage costs over the past fifteen years. Inaugurated by a
major Social Accord concluded between the central union and employers
federations in 1982, the sustained policy of wage moderation has helped to
preserve and create jobs. Wage moderation has had an especially favourable
impact on employment in sectors that produce mainly for the domestic market,
making low-wage, labour intensive production profitable again. Wage moderation
has also helped to improve the price competitiveness of Dutch industry. Because
of continued appreciations of the Guilder, the level of inflation has been
suppressed, which, in turn, has had a favourable effect on domestic wage trends,
contributing to employment and output growth.

The concerted strategy of wage moderation entailed two
political exchanges which followed each other in time and importance: one
between workers and employers, the other with the government. In the first
exchange wage moderation was traded against a modest reduction in annual and
weekly working hours. In the second exchange, between the social partners and
the government, which gained more prominence in the late 1980s, wage restraint
was compensated for by lower taxes and social security contributions, made
possible by improved public finances and a broader tax base as a result of
record job growth. The sharp increase in unemployment in the early 1980s had
saddled the Dutch welfare state with a serious fiscal imbalance. Measures
including a freeze of benefits, tightening of eligibility to programmes, a
reduction of the duration of benefits and lowering of maximum entitlements of
earnings-related benefits from 80 to 70 percent, did bring about initial
cost-savings but were partly undone through collective bargaining and could not
stop the rise of inactivity throughout the 1980s. By 1989 the Centre-Left
Lubbers-Kok government announced a policy package of financial incentives to
discourage the use of the sick leave and disability schemes. These harsh
measures provoked widespread protests and nearly wiped out the two political
parties - Christian Democrats and Labour, who took responsibility for them - in
the 1994 general elections. Ironically, because the Labour Party, overtaking the
hegemony held by Christian Democracy in Dutch politics since 1918, became the
largest party, Labour leader Wim Kok was able to forge a new coalition
government with the Liberals of the right and the centre. The Kok administration,
despite popular discontent, stepped up social security reform. In 1996 the
sickness scheme was transferred to the private sector on the basis of very
stringent public rules with respect to levels and duration of benefits.

Hard won social security reform and the revived confidence
in negotiated adjustment, endorsed by unions and employers, gradually concurred
with a general shift in the problem definition of the alleged crisis of the
Dutch welfare state. Policy-makers came to realize that the low level of labour
market participation was the Achilles' heel of the continental system of social
protection. Gradually, the central policy objective of fighting unemployment by
subsidizing easy-exit and reducing entry was replaced by maximizing the rate of
labour participation.

The extraordinary growth of part-time jobs has contributed
to the massive entry of women in the labour force, and the replacement of older
workers by younger, cheaper and possibly more flexible and skilled workers. With
some delay, the Dutch trade unions have come around in support of these changes
and taken a positive attitude towards part-time employment and flexibility. The
share of part-time work has surged from less than 15 per cent in 1975 to 35 per
cent in 1994, a share well above that of any other OECD country. Of all
part-time employment, 75 per cent of part-time jobs are held by women: 63 per
cent of all female workers are employed part-time. The incidence of part-time
work among men is at 16 per cent the highest among OECD countries (see Table 4).
The EU 15 average of male part-time employment is only 5 per cent. The
Netherlands has the highest rate of part-timers among young people in Europe (25
per cent). This suggests that entry into the labour market is commonly
channelled through part-time work.

Table 4
Incidence of part-time employment in the Netherlands and selected OECD
countries, by sex, 1973-1996 (in per cent)

Men

Women

1983

1990

1996

1983

1990

1996

Netherlands

6.8

14.8

16.1

49.7

59.3

66.1

Belgium

2.0

2.0

3.0

19.7

25.9

30.5

West Germany

1.7

2.6

3.6*

30.0

33.8

33.8*

France

2.5

3.3

5.3

20.1

23.6

29.5

Italy

2.4

2.4

3.1

9.4

9.6

12.6

Denmark

6.5

10.4

10.8

43.7

38.4

34.5

Sweden

6.2

7.4

9.3

45.9

40.4

39.0

United Kingdom

3.3

5.2

5.6

41.3

44.3

42.7

United States

10.8

10.1

10.9

28.1

25.2

26.9

Source: OECD, Employment
Outlook, Paris, July 1997, Table E
* 1995

The growth of female participation is perhaps the most
dramatic development. Female labour force participation has been extremely low
in the Netherlands in comparison to most OECD countries. Over the last decade
participation of women in the labour market increased from under 35 per cent in
1983 to 55 per cent in 1996 (see Table 5). The growth in labour force
participation is concentrated among women who are either married or cohabiting:
they now represent a quarter of the active labour force. The majority of working
women find employment in the commercial and non-commercial service sectors. The
demand for a flexible workforce in the service sector agrees with general
preference of women to work part-time. There is also a growing interest among
men for part-time work, so as to combine gainful employment work with unpaid
family care.

Table 5
Employment/population ratios by sex in the Netherlands, the European
Union and selected OECD countries, 1983-1996 (in per cent)

* Until 1993 West Germany
** Not standardized (commonly used definition)

Following protracted wage moderation, labour time
reduction, increase in part-time and temporary work, and the surge of female
market participation, average annual working hours per worker have come down
significantly since 1973 (see Table 6). However, net labour market participation
increased from 52 per cent to 64 per cent from 1983 to 1994. To be sure, it
should be emphasized that in terms of participation in full-time equivalents the
Netherlands is, at 50 per cent, still lower than neighbouring countries (Table
7).

Table 6
Average annual working hours per employee in the Netherlands and in
selected OECD countries, 1973-1996

The Dutch job miracle, currently praised by many
observers, does represent a significant departure from the scenario of 'welfare
without work' so typical of the continental welfare state. All that glistens,
however, is not gold. The present state of nearly full part-time employment may
be judged a second-best solution only. The current low unemployment rate of
under 6 per cent does not reflect the true state of slack in the Dutch labour
market. The level of structural inactivity, although declining in absolute and
relative terms, including all unemployed and inactive persons of working age
receiving a social security benefit and persons enrolled in special job creation
programmes, remains high at 20 per cent of the current labour force. New jobs
have gone predominantly to younger and better skilled recruits to the labour
market, and many are part-time, sometimes for a limited number of hours only.
Inactivity is concentrated among the low skilled, older workers, immigrants and
women. The participation rate of older males has dropped to one of the lowest in
Europe. The share of long-term unemployment has started to decrease but is still
at about 50 per cent extremely high by international standards (see Table 7).

As the twentieth century draws to a close, there is much
anxiety over the future of the advanced welfare state based on the conception of
social citizenship, as formulated by T.H. Marshall fifty years ago. Critics
point out that postwar social policy has accumulated a vast array of rigidities
which impede flexible adjustment, block technological innovation and hamper
necessary economic and employment growth. From this kind of diagnosis, the
obvious recipe is to scale down the ambitions of social policy by way of
curtailing the extent and coverage of social rights. Encouraged by American
job-machine miracle, the OECD is recommending to European policy-makers that
they de-regulate their labour markets, abolish or lower minimum wages, scale
back social security, and give up progressive taxation (OECD, Jobs Study, 1994).
European policy-makers, however, are reluctant to follow the American example of
recommodifying labour, as the unparalleled expansion of jobs in the US economy
has been accompanied by the emergence of an underclass of 'working poor', who
are unable to acquire a decent standard of living through regular earnings.

The challenge of social policy lies in the need to find
novel ways of translating Marshall's rights-based conception of social
citizenship into effective policies and institutions which are able to respond
to the new rules of global competition, deal with the new shape of working life
and take into account the new realities of family life and the predicament of
demographic aging. One constraint remains highly relevant: the 'right to work'
as a right of social citizenship cannot be effectively guaranteed in a market
economy (Elster 1988). The right to work may be anchored in a qualified public
commitment to help provide the opportunities to earn a living wage for citizens
who need and demand it, which can be underpinned by an 'active labour market
policy', but in a capitalist economy the right to work is overwhelmingly
dependent for its implementation upon the voluntary co-operation of autonomously
employing firms.

In the academic debate over the prospects for effective
social citizenship in an age of structural inactivity, two diametrically opposed
policy proposals are often advocated. 'Workfare' programmes and a 'citizen's
income'. Workfare policies are designed to strengthen and repair the conditional
links between work and income which have been lost with the expansion of the
welfare state. The underlying philosophy of workfare is one of mutual
obligations: Welfare recipients must be obliged to accept 'employment as a duty'
in order to receive benefits, while the state has the obligation to provide the
services that make employment possible. For Lawrence Mead, an ardent defender of
workfare, forced labour and/or community care in exchange for public assistance
and welfare services serves the purpose of 'remoralizing' the welfare state
(Mead 1986). Those who refuse to take part in job-training programmes should
have their social benefits taken away from them. As such, workfare programmes
engender an ideology of 'blaming the victim': the inability to find and hold
regular jobs is blamed on 'undeserving' recipients, who lack an appropriate work
ethic. For the protagonists of workfare the problem at hand, the overall decline
in the demand of low skilled labour, is unrelated to changes in the economy.

In practical terms, workfare programmes, as they mostly
involve additional public sector employment initiatives, are rather expensive.
They require intensive efforts of supervision and implementation. Most
successful are policies of vocational training and education that focus on
marketable skills, along the lines of Swedish active labour market policies. In
the United States, mandatory job programmes, based on a workfare philosophy,
have not been all that successful in achieving lasting integration of
low-skilled groups into the regular labour market (Blank 1997; Handler and
Hasenfeld 1997). Many initiatives appear to result in 'dead-end' solutions,
which is demoralizing for participants and policy-makers alike. Far more
important from a citizenship perspective is that workfare fails to meet
citizenship criteria of rights and universalism. In fact, the citizenship
content is completely absent in Mead's proposal to selectively put the deserving
poor to work for the sake of remoralizing society.

Many basic income proponents defend a basic income policy
on the presupposition of jobless growth (Offe 1996; 1997; Dore 1994; Rifkin
1996). A basic income should make it possible for people to participate more in
voluntary activities beyond the sphere of regular employment, such as community
care and learning. The foremost advocate of an unconditional citizen's income,
in line with the principles of individual liberty and equal treatment, is
Philippe Van Parijs (Parijs 1991; 1992; 1995; Parijs and Salinas 1998). A basic
right to real income, granted to all citizens, represents an fully-fledged form
of citizenship in terms of a universal right to real income, 'not proportionate
to the market value of the claimant' (Marshall 1963: 100). A basic income
fundamentally recasts the role of the welfare state. Central to a citizen's
income is the fundamental disengagement of real income entitlements from
employment status, wage-earning conditions, and the readiness to accept job
offers. Instead of providing income support for inactive workers and their
families, social protection takes place outside the labour market. By endowing
every person with wealth, basic income protagonists argue that government could
quit the business of providing social welfare, since individual citizens would
be able to take care of themselves (Van der Veen and Pels 1995; Beer 1998).

For radical policy alternatives, like an unconditional
basic income, to be adopted, they not only have to be functional to the problem
at hand; they also have to be normatively acceptable to the citizenry at large.
It remains difficult to translate Van Parijs' ideal of the 'right to surf' for
everyone in a normatively convincing way to a world in which people's real-life
moral understanding of work and social justice is rooted in conditional social
policy (Jordan 1989). Large majorities in advanced welfare states of the
European Union repudiate the 'something for nothing' philosophy that a basic
income policy seems to endorse. In the Netherlands, 65 per cent of the
population reject an unconditional basic income scheme (SCP 1994: 230).

Still, a basic income helps to reduce the costs of social
policy administration and implementation. But despite these cost reductions, an
unconditional basic income, given to all adult citizens, at the level of the
present standards of the social minimum, is extremely expensive. A less
expansive alternative is the negative income tax (NIT) alternative, which is
more narrowly targeted at the needy, and which is gradually withdrawn as incomes
rise. Like the basic income, the NIT requires far-reaching restructuring of
present systems of taxation, social assistance, social insurance, pensions, and
wage setting, incurring massive transformation costs of regime-change.

While a fundamental overhaul of the contemporary welfare
state may seem too daunting a task, many of the financial and institutional
constraints and moral scepticism with respect to a basic income policy could be
avoided by a modest, less costly, and more economically feasible and politically
viable policy option. For the continental welfare state of Germany, Fritz
Scharpf has, in a number of recent publications, suggested employing the logic
of a negative income tax, in the form of regressive employment subsidies, to
create a low-wage job-intensive sector in the fight against inactivity (Scharpf
1995; 1997a; 1997b; 1997c). Employment subsidies for low-earning workers,
Scharpf believes, are likely to improve the position of the low skilled by way
of reducing gross wage costs for employers and increasing take-home pay of low
skilled workers. Scharpf's scheme is fully compatible with citizenship, since it
is made available as a matter of right. Scharpf believes that in Germany and
other continental welfare states there is a considerable potential for an
expansion of low-skilled jobs in services like wholesale and retail trade,
personal services, personal and public safety, house improvements, environmental
protection, tourism and cultural recreation. In North America, where wages are
comparatively flexible, there has been a considerable increase in low skilled
jobs in the 1980s. The North American social policy predicament is the rising
class of the 'working poor'. The European dilemma is welfare-dependent
inactivity - jobs rather than income. Banking on the large reservoir of social
and political support for a comprehensive welfare state in Europe, Scharpf
maintains that targeted wage subsidies, following a negative income tax logic,
could permit a scenario of 'labour-cheapening' and job growth, without an
American-style surge in poverty and inequality. This could open up a wide range
of additional, economically viable employment opportunities at the lower end of
the labour market. As employment subsidies are likely to increase labour demand,
Scharpf believes that, if successful, subsidies could pay for themselves in
terms of reduced outlays for full-time unemployment. Moreover, normatively,
Scharpf's proposal of targeted employment subsidies is consistent with the
prevailing work ethic and the moral integrity of an 'employment-friendly'
welfare state to which ordinary citizens are willing to contribute through
contributions or taxes. In reply to the kinds of objections raised by Offe, it
should be emphasized that the new jobs that would be created in domestic
services would neither be confronted with the kind of productivity whip
prevalent in the exposed sector, nor do they create environmental problems.
Unlike workfare policies, which require additional public sector employment
programmes, the negative income tax logic in Scharpf's proposal has the
advantage of mobilizing private resources. Job creation and hiring decisions
remain in the hands of private firms in the regular economy.

Employment subsidies can be provided to workers or
employers. A tax credit could be given to individual workers or, alternatively,
social security charges for employers could be reduced. For the Anglo-American
welfare states, where guaranteed minimum income arrangements at subsistence
level are generally not available and unemployment benefits are low and of short
duration, individual tax credits and social services to support workers and
their families who work for wages below the poverty line would be most
appropriate. Earnings-related subsidies to working families, the so-called
'Earned Income Tax Credit', are currently the largest assistance programme for
low income American citizens (Haveman 1996; Blank 1997). For the advanced
welfare states of continental Europe, which guarantee levels of minimum income
protection above the subsistence level, it is more appropriate to subsidize
employers who are willing to hire low-skilled workers. Here the reduction of
non-wage labour costs should be part and parcel of the solution to the
predicament of structural inactivity.

In the Netherlands, the third Lubbers administration and
the first Kok administration introduced several kinds of employment subsidy
schemes (Opstal, Roodenburg and Welters 1998). The first programme, the Work
Replacement Version (KRAP-RAP) was targeted at long-term unemployed women,
ethnic minorities and low skilled groups (without a job for more than two
years). Despite a subsidy of 20% of wage costs for a four-year period together
with an initial subsidy of 4,000 guilders, the take up was disappointing. Under
the Melkert (2) programme, named after the Minister of Social Affairs and
Employment of the first Kok administration (1994-1998), employers receive a
wage-cost subsidy in the order of about half the wage costs for a two-year
period. The most recent scheme, the Low Wage Reduction scheme, also known
as Specific Social Security Contributions Concession (SPAK), covers all
jobs that pay an hourly wage of up to 115% of the minimum wage. According to
wage surveys of the Ministry of Social Affairs and Employment, SPAK jobs are
indeed taken up by low-skilled workers. However, the majority of these jobs were
occupied by new entrants, young people and partners of breadwinners, and not by
already unemployed workers. In 1998, the SPAK scheme was reformed in order to
raise the number of unemployment benefit recipients in the programme. All in
all, the Dutch employment subsidy schemes have significantly reduced employers'
wage costs, through reductions in taxes and social security contributions,
instigating a decline in the tax wedge for employers who hire long-term
unemployed. Employment subsidies can add up to as much as 25 percent of the
annual wage.

Notwithstanding the favourable verdict on employment
subsidies following an NIT logic, it is important to mention a number of
practical difficulties. Policy-makers should be aware of abuse by employers who
can simply lower their wage rate without necessarily creating new jobs. As many
of the Dutch programmes have been targeted to unemployed people who have been
out of work between one and three years, employers are tempted to substitute
long-term unemployed for short-term unemployed, or delay hiring until the
subsidy can be collected. Where new jobs are created, it is vital that
policy-makers address the quality of working conditions. It is also important to
emphasize that a policy of lowering social security contributions for employers
hiring low-skilled workers takes the productivity whip out of the old equation
between competitive adjustment and social protection. This could harm the
incentives to upgrade skills and thus raises the danger that the employment
subsidies lock up low-skilled workers in a secondary low-wage economy from which
they cannot escape. Hereby, the 'inactivity trap' is replaced by a 'skill trap'.
To be sure, in a graduated scheme modelled after the negative income tax there
remain clear incentives to get a better education and a better paid job. In the
Netherlands it seems that this risk is relatively small for young people, who
view a subsidized low-paid job as an investment in their future labour market
position. A more serious social policy question is whether cuts in employers'
social security contributions, as they lead to reductions in public spending,
will have an effect on the overall quality of social services. For reasons of
economic internationalization there has in recent years been a gradual shift in
the burden of taxation away from capital onto labour. This tendency to increase
the tax burden on workers could lead to tax-resistance, which in turn could
incite mainstream political parties to compete on the basis of their ambitions
to cut taxes, with the result of reducing public spending at the expense of the
quality of welfare citizenship. It is possible to consider raising consumption
taxes (VAT, excise duties, and green taxes on consumption) and taxing firms, not
on the basis of employees they hire, but in terms of their capital, equipment
and energy they use and the kinds of environmental damages they incur.

The postwar welfare state is founded on the normative
principle of protecting the vulnerable citizens - the aged, the sick, the
unemployed - from poverty and from social and political marginalization. While
Marshall could assume stable families and properly functioning male labour
markets, today's social policy-makers have to deal with demographic aging, the
new shape of working life and the new realities of double-income households and
the new rules of global competition. The Dutch experience, highlighted above,
gives reason for moderate optimism. Despite some continuing weaknesses, it has
contradicted the scenarios of welfare without work and of jobless growth through
its combination of sustained economic growth, low inflation, responsible wage
moderation, extraordinary full-time, part-time and temporary job creation
together with a revolutionary increase in female labour force participation,
accompanied by important social policy reform. The Dutch experience also
challenges the intuitively appealing cultural thesis of the erosion of the work
ethic as a consequence of the decoupling of work and income by way of social
policy. Gainful employment remains an important source of social integration and
economic independence. Both men and women wish to partake in regular employment,
not merely to earn a living, but also for reasons of security, social status,
prestige, companionship and engagement in collective action.

In order to maintain the universal and rights-based
conception of social citizenship, changes are necessary in the design of social
security. In particular, the paradigmatic shift in the world of work and the
world at home in a globalizing economy implies a refocusing on achieving a new
balance between flexibility and security. On both sides of the Atlantic, social
policy has to respond to universal downward shift in the demand for low-skilled
work, especially in the internationally exposed sectors, as a consequence of
economic internationalization and technological change (Ehrenberg 1994; SZW
1996; Snower and de la Dehesa 1997; Scharpf, Schmidt and Vad 1998). Two policy
options which may help to increase the employment opportunities for low-skilled
groups are relevant. First, policies geared towards improving the quality of the
workforce, through vocational training and education, are likely the reduce the
number of less-skilled workers (Crouch, Finegold and Sako 1999). However,
increasing the employability of disadvantaged groups through training and
education is not a solution for everyone. A truly positive-sum solution also
requires a concerted policy effort to increase the chances of low-skilled
workers in the regular labour market by making less productive work, especially
in the domestic service sector, economically viable. The proposals of Fritz
Scharpf for the use of targeted employment subsidies through the tax and social
security system could play a major role here. Although gainful employment is no
guarantee for a good life, targeted employment subsidies do constitute a
significant step towards economic independence, self-respect, and social
integration of low-skilled groups.

The current predicament of structural inactivity not only
adds to the fiscal crisis of the welfare state, it reinforces labour market
segmentation. By contrast, 'employment-friendly' welfare policies that provide
men and women with job opportunities, help households to harmonize work and
family obligations and train the population in the kinds of skills that the
modern economy demands, strengthen, in the words of Marshall, the 'loyalty to a
civilization which is a common possession' (Marshall 1963: 101). If the
underlying normative criterion is to counter involuntary inactivity and poverty,
there is every reason to support rights-based policies which are likely to
result in an increase of labour force participation in persons and a decrease in
hours worked, which in due course could foster a more generalized, less gendered
and more nuanced work ethic. This, in turn, could help to reconfigure the moral
integrity of the welfare state - in short, citizenship.

Acknowledgement

I am most thankful to Colin Crouch, Bernhard Ebbinghaus,
Werner Eichhorst, David Peritz and Fritz W. Scharpf for their inspired comments
and critical observations on earlier drafts of this paper, and to Cynthia
Lehmann for her editing assistance.

Barber, B.R., 1984: Strong Democracy: Participatory
Politics for a New Age. Berkeley: University of California Press.

Beer, P. De, 1998: In search of the double-edged sword.
Paper presented at the Seventh International Congress on Basic Income.
Amsterdam, September 10-12, 1998.

Beiner, R., 1995: Why Citizenship Constitutes a
Theoretical Problem in the Last Decade of the Twentieth Century. In: R. Beiner
(ed.), Theorizing Citizenship. State University of New York Press:
Albany.

Beiner, R. (ed.), 1995: Theorizing Citizenship.
State University of New York Press: Albany.

Parijs, P. Van, and C.C. Salinas, 1998: Basic Income and
Its Cognates. Puzzling Equilvalences and Unheeded Differences between
Alternative Ways of Addressing the "New Social Question". Paper
presented at the Seventh International Congress on Basic Income. Amsterdam,
September 10-12, 1998.

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